А counterfeit medicine is one which is deliberately and fraudulently mislabeled with respect to identity and/or source. Counterfeiting can apply to both branded and generic products and counterfeit products may include products with the correct ingredients or with the wrong ingredients, without active ingredients, with insufficient active ingredients or with fake packaging – WHO

Law enforcement officials are fighting to keep up with organized criminals who have found this business to be increasingly attractive because of high profit margins and comparably minimal penalties, if caught. In the words of one of the event’s speakers, the criminals are basically acting as keen businessmen and are profit-maximizing their investments. By investing as little as $1,000, these criminals can earn between a $200,000-$450,000 profit. On the other hand, investing in heroine will only yield a $20,000 payback. Because of the lucrative opportunity counterfeit drugs offer, a shift from narcotics to medicine has been observed. Falsified medications are simply more profitable

‘Lab’ for production of fake medication

Because this illicit global activity is projected to grow, it poses an increasingly complex challenge for law enforcement, and potentially devastating economic and public health risks. A rallying call from the meeting was the need for tougher punishments. Because of the cross border nature of this problem, questions arise as to what charges could actually be brought against criminals found manufacturing, selling, travelling, or being involved with these drugs. For example, in some instances criminals are being punished only for violating intellectual property rights law and not held accountable for endangering people’s life.

The European Institutes discussion focused on negative effects in Western countries, however, the effect of fake drugs is absolutely devastating in the developing world. The relatively limited effects in the US and the EU are mere drops in the ocean compared to the harms caused by fake malaria medication in areas of the epidemic. Counterfeit or poorly made medicines are estimated to kill more than 100,000 patients every year – disproportionately affecting the poor, particularly in Africa.

While some counterfeit medications are merely ineffective, others accelerate drug-resistance writes Hudson Institute Senior Fellow Jeremiah Norris. He reports that in 2004, WHO removed temporary approval (“pre-qualification”) from 18 Indian AIDS drugs and confirmed this January that “drugs which are not pre-qualified could foster resistance to AIDS drugs.”
In Thailand, some patients have become resistant to HIV treatment; being forced to switch to new treatments raises costs from $24 to $239 per person per month. In other cases, fake drugs used to treat malaria have been found containing only a small amount of active ingredients, no active ingredients, or substituted active ingredients, which could lead to patients developing severe allergic reactions to the substitutes in the fake medication.

Various solutions are being suggested including the following: portable scanners with the ability to detect fake drugs, individual coding verified by SMS, tougher punishments, and stricter enforcement of patent rules. It is important not to conflate falsified medications with cheaper generic medication. Having emerging economies like India and China enforce better control mechanisms in the manufacturing of proven generics under international patent treaties could tremendously curb counterfeit production.

AIDS patients will suffer further if India continues to export unregulated copies to poor countries, and thereby accelerating drug resistance and the mutation of HIV. The massive extra cost of treating drug-resistant patients far outweighs the little saved by using poorly manufactured copy drugs.

The Center for Global Prosperity is focused on educating policy leaders and the general public on the crucial role of the private sector (both non and for profit) as a source of economic growth and prosperity around the world. To accomplish this central mission, the Center produces The Index of Global Philanthropy and Remittances, which identifies the sources and amounts of private giving around the world and The Index of Philanthropic Freedom, which identifies the barriers and incentives to private giving in 64 countries.